Re Keen. Evershed v Griffiths [1937] Ch 236

KEY POINTS

• A will is a legal document outlining how a person's assets should be distributed after their death.

  • Construction is the legal interpretation of a will to determine the testator's intentions.

• A secret trust involves leaving a gift in a will to be held in trust for an undisclosed beneficiary.

• Objects of Trust to be Notified by Testator in His Lifetime means beneficiaries of a trust should be notified during the testator's lifetime.

  • When beneficiaries aren't notified of a trust during the testator's lifetime, legal complications may arise. A memorandum given to a trustee before the will's execution can contain additional instructions.

• A trust can be invalidated due to legal flaws or lack of clear intent, leading to redistribution of assets according to the will or state laws.

FACTS

• A Testator's will granted £10,000 to his trustees with instructions to distribute it among certain persons or charities as he would notify them during his lifetime.

  • If no notification was given, the amount would become part of the estate's residue.

• Harry Augustus Keen (“Testator”) had previously executed a similar will (later revoked), during which he told Mr. Evershed (“one Trustee”) about a person he wanted to benefit, whose identity was to be kept secret.

  • He enclosed this person's name and address in a sealed envelope, which he handed to the trustee with instructions not to open it until after his death.

  • The Testator did not communicate any further information regarding the envelope before he died.

  • After the Testator's death, the Trustee opened the sealed envelope, revealing the message "£10,000 to G." with a name and address. The second Trustee was unaware of this arrangement until then.

• A summons was filed to determine if the Testator had established a valid secret trust for "G."

• Justice Farwell decided that the Trustees had not been notified during the Testator's lifetime, leading to the conclusion that the secret trust was invalid.

JUDGEMENT

• The Court of Appeal ruled that a secret trust based on a sealed envelope containing a beneficiary's name could not be validated.

  • The Testator's will had granted £10,000 to Trustees to be distributed among persons or charities as he might notify them during his lifetime.

  • The sealed envelope, handed to a trustee prior to the will's execution, was opened after the testator's death, revealing the intended beneficiary.

• The Court of Appeal held that this form of future unattested disposition conflicted with the Wills Act 1837.

  • Since the trust was not established within the formal structure of the will and the notification to the Trustee occurred before the will's execution, the court concluded that the trust was invalid.

  • As a result, the legacy would fall into the estate's residue.

  • The decision by Farwell J. was affirmed, albeit for different reasons. 

COMMENTARY

• This case is about legal principles regarding wills and trusts. It highlights the importance of clear communication and adherence to formal requirements.

  • The Testator's attempt to create a secret trust through a sealed envelope fell short of legal standards. 

• The Court of Appeal ruled the trust invalid due to non-compliance with the Wills Act 1837 and lack of notification to Trustees during the Testator's lifetime.

  • This decision emphasizes the necessity of meticulous estate planning to avoid legal complications.